Jim Rosenheim at the Tiny Jewel Box on Connecticut Avenue. He is the second generation of his family to have run the landmark business his parents started in 1944, originally specializing in vintage jewelry. (Ricky Carioti/The Washington Post)

When incoming first lady Michelle Obama wanted to give outgoing first lady Laura Bush a meaningful gift, she didn’t have to go far.

Right up the street was Tiny Jewel Box, a family-owned store on Connecticut Avenue, where Obama bought her predecessor a red leather journal and engraved sterling silver pen.

Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington Metropolitan area. Previously, he wrote about the business of sports for The Post’s sports section for most of a decade. View Archive

Tiny Jewel Box, whose customers have included the likes of Barbra Streisand, the late Washington Post Co. chairman Katharine Graham, and a bevy Middle East potentates, got some free publicity when the gift appeared on worldwide television. One customer from Mumbai called the store to say he recognized the shopping bag.

Tiny Jewel Box is one of those Washington landmarks, nestled in a cozy, six-story building a few steps from the Mayflower Hotel. Its red awnings and its brass nameplate project an air of exclusivity that reminds me of something out of New York’s Upper East Side.

It was once home to the Elizabeth Arden cosmetics store.

The business, now owned and run by the third generation of the Rosenheim family, is remarkable for its staying power in a highly competitive industry. I asked Jim Rosenheim, its ebullient chief executive, how the company has survived while many of its competitors in downtown Washington have closed or moved.

“The secret of my success is our philosophy of being a store out of the 1940s or 1950s,” said Rosenheim, 70, who made his first jewelry sale at age 6. “We are not about making sales. We are about building relationships.”

The culture begins with the sales associates who forge those relationships. TJB’s salespeople are salaried, long-time employees.

They are paid extremely well by retail standards, have a 401(k) with a match, and health care. The average tenure for one of his 30 or so employees is 10 years. Rosenheim’s late mother sold at the store into her 90s.

“The only time employees leave is when they retire, get sick or die,” said Rosenheim, who personally interviews every job candidate to ensure they have the right chemistry.

Each employee undergoes an exhaustive annual written review that covers their sales, how they follow store policies, interaction with customers, and how they cooperate with each other. Some end up with bonuses that can equal 10 percent or more of their salary, depending on how they and the store did financially that year.

“If the store has a bad year, everybody suffers,” Rosenheim said. “If it has a good year, a rising tide floats all boats.”

He estimates that he has a core group of 35,000 customers, with the biggest bunch coming from Washington’s legal establishment.

“It’s a pretty conservative clientele, with lots of attorneys and bureaucrats,” he said. “Their lifestyle has to reflect stability. You don’t see many women with 25-carat diamond rings on their fingers like in New York or Los Angeles.”

But TJB still has his share of bold-face names. Rosenheim once kept the store open late so the brother of Jordan’s late King Hussein — and a retinue of security guards — could drop by for some exclusive shopping.

To keep those 35,000 customers coming back is a key factor in TJB’s profitability. One big draw is that the store exclusively represents Swiss luxury watchmaker Rolex , and high-end jewelry designers David Yurman and Alex Sepkus in downtown Washington.

The margins aren’t great on those items, but they bring customers in the door. Then Rosenheim relies on his no-pressure sales staff, and his store’s cosmetic appeal, to create a welcoming experience that, well, will make people want to spend money on other things, whether they be a scarf, a baby gift or a $300,000 diamond ring, which someone once bought.

“We ran a rather complicated computer analysis of new customers, and 70 percent came back and transacted business with us in the next 12 months after their first purchase,” he said.

During the run-up to the financial crisis, TJB was averaging around 200 new customers a month, which he called a “monstrously high” number that has since retreated.

TJB grosses more than $10 million a year, with the vast majority of revenue coming from three areas: diamonds and bridal; designer jewelry; and watches, dominated by Rolex, which average around $9,000 per sale.

The corporate practice, about 10 to 12 percent of revenues, sells company gifts to clients from Johns Hopkins University to National Geographic to The Washington Post.

Rosenheim would not tell me what the business earns in profit, except to say that most years—except for the disastrous 2009—it does nicely.

Rosenheim, a natty, chatty fellow who walks to work each day, gave me a tour of the luxury boutique last week, pointing out everything from the fine millwork, high-tech lighting and the painstaking interior paint job (six painters labored 30 days).

“The whole gestalt of Tiny Jewel Box is all tied up in how it looks today,” Rosenheim, who spent more than $6 million on the building in 1996 after taking it over from his parents.

The first Tiny Jewel Box really was tiny.

It started in 1944 in a 100-square-foot breezeway on G Street NW, which had no running water and no heat. His father, Monte, and mother were salespeople who wanted to own their own business.

Back then, Tiny Jewel Box specialized in estate and antique jewelry, becoming a serious player in what is known generally as “vintage jewelry.”

“I asked my father how come you don’t carry the same merchandise other stores do, and he said ‘I want a niche. I want to give people a reason to come to me, not by accident, but because it was something different and unique,’ ” Rosenheim recalled. “That resonated with me.”

The Rosenheims concentrated on vintage jewelry for decades, even after moving in 1958 to a location near the intersection of Connecticut Avenue and L Street, a few steps from the Mayflower Hotel. That location was torn down when the Farragut North Metro stop was built.

Jim Rosenheim took over in the 1980s, buying out his parents and moving the company beyond vintage jewelry and into designers, Italian gold, corporate gifts and, eventually, watches. He traveled throughout Europe, buying jewelry in Germany, France, Italy and England.

Washington’s booming economy cooperated, boosting revenues enough to allow Rosenheim to invest more than $6 million in his current location, buying and refurbishing the six-story building. He eventually bought the building next door as well.

Rosenheim is still chief executive, although he has sold the business to his son, Matthew, and daughter, Jessica.

Comments our editors find particularly useful or relevant are displayed in Top Comments, as are comments by users with these badges: . Replies to those posts appear here, as well as posts by staff writers.

To pause and restart automatic updates, click "Live" or "Paused". If paused, you'll be notified of the number of additional comments that have come in.

Comments our editors find particularly useful or relevant are displayed in Top Comments, as are comments by users with these badges: . Replies to those posts appear here, as well as posts by staff writers.